Audit and Governance Committee

22 June 2022

Fraud and Whistleblowing

For Review and Consultation

Portfolio Holder:	Cllr S Flower, Leader of the Council

Executive Director:	J Mair, Director of Legal & Democratic

Report Author:	Marc Eyre

Title:	Service Manager for Assurance

Tel:	01305 224358

Email:	marc.eyre@dorsetcouncil.gov.uk

Report Status: Public

Brief Summary: The Audit and Governance Committee receives an annual report on fraud and whistleblowing, which provides an update on the Councils approach, including a summary of cases reported in the preceding twelve months.

The opportunity has been taken to review the supporting policy framework, which was previously approved by Shadow Dorset Council. A number of minor amendments have been made, based on changes to legislation and lessons learnt from incidents.

Recommendation: The Committee are asked to:

Note the annual update on fraud and whistleblowing activity;

Approve the following updated policies:

Whistleblowing Policy and Procedures;

Anti Fraud, Corruption and Bribery Strategy;

Anti Money Laundering Policy

Reason for Recommendation: To support the Council’s zero tolerance to fraud.

Summary of Anti Fraud Initiatives

South West Audit Partnership (SWAP) completed an audit on “Fraud and Reporting” in April 2021, with the objective of providing assurance that the fraud management arrangements are clear and accessible. This included a follow-up on a 2018 review of whistleblowing. SWAP completed a second piece of fraud reporting in May 2021, which provided a cross-cutting baseline assessment report on the maturity of fraud management across wider SWAP partners. The recommendations from all of these reports have been responded to via an action plan, the key elements outstanding are noted below:

Theme	Latest Position	Status
Policy framework	A number of amendments have been made to the fraud policies, and are included with this report (Appendix A – C) for ratification. Sections 1.2, 1.3 and 1.4 refer.	Target June 2022
Fraud Risk Assessment	SWAP are in the process of completing the fraud risk assessment review with services. On completion, the output will be embedded into the existing risk register process.	Target June 2022
Communication	Intranet pages have been updated, and a reminder on whistleblowing issued by the Chief Executive in May 2022. Communication will be refreshed on approval of the revised policies.	Target June 2022
Training for Officers and Members	This remains an outstanding action, to be completed once the fraud risk assessment process is finalised.	Summer 2022
Fraud identification	A number of service areas have initiated data matching via Cifas (as part of our internal audit arrangements with SWAP). Regular updates are provided via the quarterly SWAP audit reviews to this committee	Ongoing

Whistleblowing Policy and Procedures – A number of adjustments have been incorporated, based on learnings from a 2021 whistleblow case and following internal audit recommendations. This includes adding a time restriction for appeals (3.11); clarification on the employee definition (6.1); and adding an email address to the whistleblowing hotline. Consideration was given to including a risk assessment as part of the policy to determine the extent of investigation. On consideration it was felt that this would be counter-productive to our zero tolerance on fraud..

Anti Fraud, Corruption and Bribery Strategy – A clearer definition of fraud has been included, following internal audit recommendations (1.1). As with 1.2 above, inclusion of a risk assessment was considered but removed..

Anti Money Laundering Policy – Cosmetic change to identified legislation (p1 Scope).

The above policies have been reviewed via Corporate Leadership Team and are submitted to Audit and Governance Committee for ratification.

Reporting of Whistleblowing and Fraud – 2021/22

Whilst any issues reported via the Whistleblowing hotline or directly to either the Monitoring Officer or Section 151 Officer will be recorded centrally, other issues that could constitute fraudulent activity (for instance those related to staff code of conduct) are investigated and reported separately via Human Resources. At this point in time, this report focuses on issues reported to the Monitoring Officer or Section 151 Officer.

The purpose of the whistleblowing policy extends beyond fraud to other perceived cases of malpractice, whether behavioural, procedural or in respect of health and safety failings.

The whistleblowing policy sets out a number of mechanisms for notification of fraud or other perceived malpractice. The table below sets out whistleblowing activity during 2021/2022. None of these reported issues related to alleged fraud:

Whistleblowing hotline:	No notifications received
Notification to Manager / Executive Director / Chief Executive :	Two notifications received, both related to management/procedural matters. The first related to Childrens Services financial management issues. SWAP were initiated to carry out a review and the issues raised were partially upheld. The second issue raised related to a complaint against Childrens Services that was already being managed within the complaints process and therefore the whistleblowing case was closed.
Notification to the Monitoring Officer :	None
Notification to the Section 151 Officer :	None
Notification to SWAP :	Member of the public contacted SWAP raising concerns relating to a number of corporate services. The spirit of the whistleblowing policy was applied and related audit work initiated via SWAP. The issues reported had already been noted and rectified by the services and no significant matters identified during the audit review.

Financial Implications

Fraud presents a financial risk to the Council which needs to be managed to reduce risk down to an acceptable level.

Climate Implications

None

Well-being and Health Implications

None

Other Implications

None

Risk Assessment

HAVING CONSIDERED: the risks associated with this decision; the level of risk has been identified as:

Current Risk: Medium

Residual Risk: Medium

Equalities Impact Assessment

Fraud policies have been subject to EQIA.

Appendices

Appendix A - Whistleblowing Policy and Procedure

Appendix B - Anti Fraud, Corruption and Bribery Strategy

Appendix C - Anti Money Laundering Policy

Background Papers

None